NAIOP Research Foundation | Seeing Past the Pandemic: Industrial Demand and U.S. Seaports
By: Brian Harper, Director of Data Science, Avison Young, and Aaron Ahlburn, Innovation Lead, Global Logistics, Avison Young
Release Date: March 2022
Supply chain disruptions have never been more salient to the average consumer. Congested seaports have received particular attention as record levels of inventory have piled up at ports and ships have been stuck offshore waiting to unload. While low levels of vacancy indicate robust current demand for industrial assets, developers, investors and building owners may wonder how closely industrial demand is tied to port activity and whether the current boom is sustainable.
This research brief, authored by Avison Young, reviews historical trends in port activity, local logistics employment, and vacancies, rents and absorption rates in adjacent industrial markets. Building on observations from the historical data, a regression analysis of the relationship between changes in port activity, truck traffic and industrial space absorption demonstrates that changes in import volume have a substantial effect on occupancy in port markets. Although the current port congestion may not last, industrial landlords can have confidence that port-accessible space will remain in high demand, even in the face of new construction.